Keep pushing for oil spill settlement (Editorial)

Activity at the site of the Deepwater Horizon oil spill in the Gulf of Mexico off the Alabama coast is viewed from a Coast Guard HC-144A plane Thursday, June 10, 2010. (AP Photo/ Press-Register/John David Mercer)

HUNTSVILLE, Alabama _ Nearly half way through the Alabama legislative session, a settlement is being negotiated in the BP oil spill lawsuit that could pump hundreds of millions, if not several billion dollars, into state coffers.

State lawmakers would be wise not to count on this money while crafting the budgets. Even if a settlement is reached, the Legislature should not use one-time money to avoid tough budget decisions.

Because when it runs out, they'll have nothing to bail the state out of the next budget crisis.

The oil giant reached a partial settlement over the weekend aimed at individual claims.

The reported $7.8 billion agreement would apply to tens of thousands of victims along the Gulf coast, including fishing operators who lost work and cleanup workers who were sickened.

A federal court in New Orleans must still officially sign off on it.

Still pending, however, are scores of lawsuits with federal, state and local governments that incurred cleanup costs and lost millions of dollars from tourism.

The lost business had a trickle-down effect on tax revenues for schools and other state services.

State Attorney General Luther Strange emphasized the settlement announcement between BP and private plaintiffs "does not impact Alabama's claims against BP and the other defendants for the damage done to our economy and the environment.

"We are fully prepared to try our case, and we hope that the court sets a new trial date in the near future," Strange said in a statement Saturday. "Alabama will continue to work closely with the U.S. Department of Justice and the other Gulf states to hold BP and the other defendants fully accountable for the disaster in the Gulf."

Strange, lead counsel for Alabama and Louisiana, which has also sued BP and other companies linked to the 2010 Deepwater Horizon oil spill, is wise to continue preparing for trial while remaining open to settlement talks.

A settlement would save millions of dollars in legal expenses for both sides and years of limbo from any ensuing trial. After the Exxon Valdez disaster in 1989, the company ultimately settled with the U.S. government for $1 billion, ($1.8 billion in today's dollars) but took years to pay it.

The environmental fallout alone from the BP calamity could last for generations. So any settlement must also include redress for damaged tidal estuaries, beaches and marine life.

Many agree a quick settlement is in BP's best interest to avoid "gross negligence" findings, which could elevate the damage award to more than $60 billion, which even the defendant energy companies would find difficult to absorb.

Obviously, the bulk of any settlement must go to coastal areas to restore the environment and compensate for deep losses in income and property values. But state coffers must also get a cut to replenish lost tax dollars from the blow to commerce.

Oil spill money may or may not be forthcoming to Alabama anytime soon.

But if the government does settle, it should be for the stiffest amount possible to deter a similar disaster.